We’ve been talking about making Human Resources strategic for decades, but organizational readiness, resistance to change, and complicated and expensive technology issues continue to get in the way.
When you are at a conference, there are moments when you truly relate to a speaker. You understand exactly what the person is saying, almost as if they were using your organization as a model. The topic may be strategic human resources, general business strategy, the impact that technology can have in the workplace, or how efficiencies can drive more money to the bottom line. You, as a sitting HR professional, have a larger challenge in front of you following the conference; choosing your moment to bring these strategic human resources thoughts forward in your company.I know how you feel. You’ve been through this more than once. You start a conversation with the "C" people (COO / CEO / CFO) upon returning from a conference, or you’ve been asked to "clarify" your request for a budget increase to cover HR expenses. What you get is the chance to focus on the two big Rs: Recruitment and Retention. If you’re lucky, you may even get to talk about, dare I say it? Succession Planning.
Then as you walk back into your office, reality smacks you in the face as if you had forgotten to open the door when you turned the corner. You realize you were given lip service - again. The reality is - nothing has changed. Bummer.
Now, what can you really do to make a strategic human resources difference? How about making a plan? Maybe even issuing a challenge to yourself? Now you are truly committed to making the strategic process move forward, rather than in circles. Let's use a technology solution as an example.
Strategic Human Resources: The Hurdles
- Hurdle One: WIIFE (What’s In It For Everyone). You attended the training session, got the materials, and did a walk through on the presentation. Your COO is still thinking, "Yea, but what does this have to do with me and my people. Just get out there and recruit the talent I need."
- Hurdle Two: A simple and affordable technology solution is critical to managing the employment life cycle. You need to demonstrate how technology facilitates the "transactional" side of the business so you can implement the "developmental side." This is the work that creates value because it contributes to the corporate bottom line.
The package – the what – is the retention tool. The process is the how and directly impacts retention (just ask your Generation X, Y and Z people).
- Hurdle Three: Communicate the solution in terms executives understand – dollars and cents. Let’s start by showing some turnover costs:
Sample Turnover Costs
Employee Salary: $7/hr.HR Salary: $35,000
Training Manager Salary:$10.00 per hour
Days to 100% Trained: 90 days
Total Turnover Cost: $6,440
More Sample Turnover Costs
Employee Salary: $75,000HR Salary: $50,000
Training Manager Salary:$50,000
Days to 100% Trained: 90 days
Total Turnover Cost: $27,290
Currently, I am working with a unique hospital in a rural community. They employ about 300 people and admit to an annual 10% turnover rate. So let’s run some conservative turnover numbers to create a simple example:
10% Turnover Scenario for One Month
100 nurses, turning 10 nurses at $30,000 annually - $136,250
5 Kitchen/Custodial Staff - $32,200
3 Mid-level Managers - $46,815
1 Director - $27,290
1 Executive - $34,925
Total Turnover Cost - $277,480
These numbers are based on filling positions within 30 days with 15 days of training. (Quit laughing, we have to start somewhere.) Here is the calculator if you want to use bigger numbers. If I put in big numbers to start, you would not keep reading and neither would your executives.
Strategic Human Resources: The Solutions
- Solution One: Prepare typed notes and handouts only as backup to the hard data listed above. Numbers, charts, and “beans,” are the WOW factors that show impact to the bottom line – and the bottom line affects everyone.
- Solution Two: Identify your technology partner. Few providers offer a single source solution, but they’re out there. All-in-one, integrated technology gives you the tools to facilitate every aspect of the process and gives employees self-service access to information (freeing you to work on the package).
As examples, to select better people, you can screen out those that don’t fit and those who will not stay. You can communicate with the employees to address concerns before they become problems. When people leave, you can identify trends and adjust internal systems, aiding in retention and productivity.
- Solution Three: Talk the language and let the numbers help you prove your case. Even if your timing is off, the facts will speak for themselves.
Set your goals, do the research and formulate your strategy. Use your prospective service provider as a partner to keep the process moving forward. Being strategic requires bottom-line thinking. Transforming the role of HR as a strategic partner means communicating your potential and focusing on one objective – increased profitability. Reaching this common goal is unifying and optimizes the total work experience for everyone.
